Sure, it’s mostly the talk of Wall Street hedge fund folks, but it’s sent Palm’s stock up 20 percent, or 77 cents to close at $4.62 Wednesday. Is Lenovo actually interested in acquiring Palm’s sagging smartphone business? Perhaps. But there are several other companies that could benefit even more from buying instead of building a smartphone business from scratch. Palm’s chances of a comeback are fading. Who can rescue the company? Likely a PC maker.
Palm is ripe for a buyout because, well, the company is running out of options. As my colleague Tom Krazit pointed out recently, it might be time for the company to throw in the towel. Their chances for a turnaround are getting slimmer as their heavy investment in WebOS and the Palm Pre and Pixi haven’t produced the desired effect. Palm sold just 408,000 phones last quarter. By comparison, Apple sold 8.7 million iPhones during the same time period.
So who should rescue or absorb Palm? Probably a PC company. Besides the fact that more cell phones are sold annually than computers, in developing countries over the next few years the first computers people will own will be a mobile phone. So it makes sense that companies that make PCs would want to get in on the action. Plus, the smartphone and the computer are merging, and as Apple has demonstrated, being at the nexus of the two is smart business.